Posts: 1628
Location: carl sagan's universe
Posted on: 12-03-07 21:08:02
Location: carl sagan's universe
Posted on: 12-03-07 21:08:02
Quote:
Originally posted by Pramod Chopra
[It depends when you are planning to buy the house. If you are not buying the house till end of June, 2007 you can put money in RRSP and that would give you tax benefit next year. I am sorry, but nothing can be done for 2006 tax year now.
Hi Pramod,
Please, if you don't mind, for my edification and for many on the board who want to know but are afraid to ask...why does one have to wait till end June 2007 to buy the home in order to get a tax benefit on an RRSP conribution done now.
Perhaps I misunderstood your statement.
Quote:
Originally posted by investpro
Quote:
Originally posted by Pramod Chopra
[It depends when you are planning to buy the house. If you are not buying the house till end of June, 2007 you can put money in RRSP and that would give you tax benefit next year. I am sorry, but nothing can be done for 2006 tax year now.
Hi Pramod,
Please, if you don't mind, for my edification and for many on the board who want to know but are afraid to ask...why does one have to wait till end June 2007 to buy the home in order to get a tax benefit on an RRSP contribution done now.
Perhaps I misunderstood your statement.
Hi Investpro,
With great regards to your knowledge and experience, I would request you to see the original post of Seenappa where in he mentioned that he forgot to invest in RRSP in time to get the tax deduction for tax year 2006.
What I understand from this is that he wanted to deduct RRSP contribution on his Tax Return for year 2006 which he would file in 2007 on or before April 30, 2007. But as he forgot to contribute till the deadline of 1st March, 2007 for the tax year 2006, I do not see how he can do that now as advised by you in your earlier post quoted below.
Quote:
Originally posted by investpro
If you have the money, any time is a good time to invest either in RRSP or in a non-registered a/c.
Contrary to a previous post, you can invest in an RRSP now, buy your home after 90 days of leaving it in an RRSP, use those funds for the HBP (Home Buyer's Plan), and still deduct it from your deduction limit for 2006 in 2007. You do not have to wait till end June, 2007 to buy your home.
Since, Seenappa mentiond that he wanted to contribute in RRSP to take advantage of Home Buyer Plan but he forgot to contribute earlier that's why I advised that he can contribute now and easily take advantage of Home Buyer Plan and take tax benefit for year 2007.
Though technically, If he contributes today (12th March, 2007) in RRSP for home buying purposes, he can buy a house by 13th May, 2007 and withdraw the same money from RRSP on 12th June, 2007 and this withdrawal would still be counted towards HBP and of course, he would get tax benefit for year 2007.
The reason I mentioned by June end only to make things easy so that he can contribute now to RRSP subject to his contribution limits, let it remain there for 90 days and withdraw the funds before the closing of the house and he would not have to rush for every thing as he would have a margin of more than 2 weeks time with him to do every thing well in time.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
1. contribute to RRSP now and wait 90 days to withdraw for first time home buyers plan.
2. If you had contributed before mar 1 you could have benefitted by getting income tax deduction for 2006 ..but now you can use this towards 2007 income tax deductions.
3.Even if you are not buying your house now do contribute lumpsum you can afford as you earn returns on that amount for the whole year instead of waiting till end of year or so ..alternatively invest in Non reg investment for time being and then switch them over to rsp in jan /feb next year.
4. calculate your contribution limit available + possible for next year and start pre authorized contributions either biweekly or monthly strightaway so as to avoid same situation next year apart from other benefits.
Posts: 1628
Location: carl sagan's universe
Posted on: 14-03-07 08:56:53
Location: carl sagan's universe
Posted on: 14-03-07 08:56:53
Quote:
Originally posted by Pramod Chopra
The reason I mentioned by June end only to make things easy so that he can contribute now to RRSP subject to his contribution limits, let it remain there for 90 days and withdraw the funds before the closing of the house and he would not have to rush for every thing as he would have a margin of more than 2 weeks time with him to do every thing well in time.
Hi Pramod,
Thanks for the puff piece at the outset. You're pretty on the ball too!
I gotcha. You were just saying end June to be on the safe side and give some leeway in time. Always good to be prudent! Nice!
